SAO PAULO: Like many Uber drivers in Sao Paulo, the ride-hailing app's busiest city in the world, Augusto Caio Pereira does not actually own or lease the car he nudges through the city's notorious traffic jams every day.
Cheap access to new cars is turbocharging the growth of Uber and rental car companies in Brazil, as well as lifting automakers' sales - up 7per cent this year.Yet the sales growth also obscures a deeper crisis for carmakers such as General Motors: their margins are imploding as rental companies gobble up more and more cars at discounted prices.
One recent survey presented by Anfavea showed that transportation alternatives like Uber were the second reason, after weak personal finances, dissuading Brazilians from buying cars. "GM in Brazil has posted significant losses between 2016 and 2018, a situation that CANNOT BE REPEATED," read the message, which was seen by Reuters.The scale of the wholesale discount to rental companies is a closely guarded secret.
Meanwhile, Localiza went from buying 2per cent of the country's new cars and light trucks in 2012 to 10per cent this year. Ride-hailing drivers are its fastest-growing segment.With Brazil only recovering slowly from recession since 2017, automakers have had little choice but to follow demand into wholesale, said Guido Vildozo, of research firm IHS Markit.In 2013, the year before Uber came to Brazil, just 6per cent of new Chevrolet Onix units were fleet sales. This year it is over 40per cent.